The delivery of second class letters on Saturday could be shortened

Royal Mail could be given permission to stop delivering second-class letters on Saturdays, as part of reforms being considered by the regulator.

Ofcom is also investigating whether it would be possible to offer second class deliveries on other working days, which could reduce costs for Royal Mail.

The regulator has revised the Universal Service Obligation (USO), which legally requires Royal Mail to deliver letters six days a week and parcels five days a week.

The number of letters sent through the post has been steadily declining for years, while the number of parcels has increased, leading to millions of pounds in losses for Royal Mail.

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Lindsey Fussell, director of networks and communications at Ofcom, told the BBC’s Today programme that the universal service “does need to change”.

“To be clear, no change is not really an option, otherwise it is unsustainable and we will all have to pay much more for it,” she said.

Royal Mail’s owner, International Distribution Services, said “change cannot come soon enough”.

It was suggested that Saturday deliveries of second class mail should be scrapped and weekday deliveries made, both options now being investigated by Ofcom.

In theory this means that second class deliveries are made on Monday, Wednesday and Friday one week, and on Tuesday and Thursday the following week.

Martin Seidenberg, CEO of IDS, said: “Universal service provision faces a very real and urgent challenge in terms of financial sustainability.”

Ofcom said no final decision had been made and it was continuing to assess possible changes. It aims to publish a consultation close to next year and make a decision in the summer.

Last year, Ofcom fined Royal Mail £5.6 million after the company failed to meet first and second class delivery targets.

Ms Fussell said: “We are now looking at whether we can restore universal service provision in a way that meets people’s needs.”

“But this will not be a free pass for Royal Mail. The company must, in any case, invest in its network, become more efficient and improve its service levels.”

The UK Greeting Card Association said it was concerned that the options outlined by Ofcom “take us one step closer to dismantling a postal service that is affordable and reliable”.

The association said that cards were the most frequent thing people posted. “Any changes to the USO must prioritise the needs of small businesses and consumers – not the profitability of Royal Mail,” the association said.

The number of letters sent in the UK has halved since 2011, according to the regulator. By contrast, parcel volumes have skyrocketed, particularly during the pandemic when lockdowns prompted millions of people to shop online.

Royal Mail is also facing increasing competition from other parcel delivery companies.

It has raised the price of stamps several times in recent years. In March, the cost of both first-class and second-class stamps rose by 10p each, to £1.35 and 85p respectively.

In its last full financial year, Royal Mail’s loss was £348m.

IDS is set to be acquired by Czech billionaire Daniel Kretinsky for £3.57 billion.